How does the CLARITY Act open up practical data-conversion opportunities for Wall Street?
The full transformation of financial assets, including stocks and real estate, into digital tokens depends on the passage of the U.S. Clarity Act.
The City Institute expects the tokenized assets market, currently valued at $17 billion, to reach $5.5 trillion by 2030.
This ambitious shift will rely on market-structure providers, regulated capital growth on the blockchain, and regulatory clarity.$BTC
The U.S. Digital Asset Market Clarity Act (the CLARITY Act), awaiting a vote in the Senate, promises to unleash Wall Street’s potential to convert financial assets into tokens—including U.S. Treasury bills and bonds, private credit, real estate, and commodities—on a scale that can boost the real-world assets market from its current $17 billion level to $5.5 trillion by 2030, according to a report by the City Institute.
Estimated tokenized market size | Estimated growth in tokenized market size | Source: City Institute
Wall Street on the blockchain
From an adoption perspective, tokenizing real-world assets hasn’t been hindered by a lack of technology or innovation, but by regulatory risks. While Wall Street banks, private equity firms, and asset managers may want to represent securities digitally as tokens executed on blockchain infrastructure, regulatory uncertainty, a lack of blockchain settlement funds, and the fragmentation of financial systems have all contributed to blurring the line between adoption and expected growth.
The City Institute report notes that, in practice, the growth of tokenization will be “driven by public-market securities, especially equities and U.S. Treasuries, rather than private markets, where adoption remains in early stages and is structurally constrained.”
Several factors are capable of shaping and accelerating a risk-weighted asset tokenization market, including major players in the financial market infrastructure. The Depository Trust & Clearing Corporation (DTCC), the New York Stock Exchange (NYSE), and Nasdaq will be critical to tokenization, issuance, trading, and settlement at a scale far beyond the experimental stage.
“Tokenizing financial assets is more than just technology; it opens Wall Street to the native digital generation,” said Artem Korynyuk, head of institutional digital assets in Citi’s client business development division.
The development of regulated funds on the blockchain—which includes a $300 billion stablecoin market and tokenized deposits—is expected to function as a settlement layer that previous tokenization projects have lacked.
The CLARIY Act will serve as the link that ensures not only that all elements are in place, but that they work in harmony. It starts with separating oversight of digital assets between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and extends to providing a legal definition of securities tokens as securities or commodities.
This distinction is crucial because securities are subject to strict registration and compliance requirements, while commodities benefit from a relatively flexible regulatory framework.
Is institutional participation increasing?
Converting real-world assets into digital tokens is the future of global finance, supported by programmable assets and direct settlement on blockchain technology for continuous, 24/7 trading. In this case, blockchain-based finance means collateral, liquidity, and settlement operate in real time and across borders.
Although institutional adoption of tokenized assets and deposits is still in its early stages, it will represent the next phase of growth in the risk-weighted asset sector.
Researchers at the City Institute confirmed in the report that “institutional participation has now moved beyond the pilot stage, with tokenization technology being used in issuance, trading, and post-trade activities. Regulatory clarity is also improving across key jurisdictions, providing a degree of legal certainty for institutional adoption of this technology.”
The benefits of tokenization are likely to emerge gradually rather than all at once. Adoption still faces disparities in asset classes across different legal jurisdictions, operational interoperability challenges, and different legal frameworks, such as the Markets in Crypto-Assets Regulation (MiCA) in the European Union, and the upcoming CLARITY Act in the United States. Other obstacles include liquidity coordination, market conventions, and investor behavior.
Institutions are ready to build on clear regulations that enhance stability and reassure investors that future governments won’t roll back key developments or throw the financial market into chaos.
A report from 21Shares says that “the importance of the bill lies not in being a catalyst for access to cryptocurrencies, but in structural changes.” Currently, investors can invest in Bitcoin (BTC) and Ethereum (ETH) and Ripple (XRP) through exchange-traded funds (ETFs) without needing the CLARITY Act. However, institutions require a broader, more sustainable, legally binding structure that later administrations would find difficult to undo.
The 21Shares report adds: “Instead, it defines a key structural distinction: a temporary regulatory position based on the current administration versus a law enacted that provides a permanent, legally binding framework that is difficult to easily repeal by future administrations.”
Nevertheless, leading institutions adopting tokenization have launched products over the years, including BlackRock’s BUIDL, with capital ranging from $2.4 billion to $2.6 billion across multiple chains. Other notable issuers of tokenized assets include JPMorgan Chase with Kinexys, Franklin Templeton with BENJI/FOBXX, and BNY Mellon, Citi, and Fidelity.
The New York Stock Exchange (NYSE) plans to launch a platform for tokenized securities in late 2026, subject to regulatory approval. This offering will allow trading of U.S.-listed stocks and exchange-traded funds 24/7 throughout the week, with near-instant settlement, supported by stablecoins.
The U.S. Securities and Exchange Commission approved Nasdaq’s request to list certain stocks and ETFs as tokenized assets for trading and settlement. Nasdaq is working to integrate tokenization into its existing market infrastructure.
“You’re seeing the full weight of U.S. financial power and the global reserve currency moving broadly across blockchain technology. When DTCC and the New York Stock Exchange integrate tokenization technology into capital markets, that is a critical turning point,” said David Cunningham, Global Head of Institutional Business at ConsenSys.
Chances of passing the CLARITY Act are diminishing
The U.S. Congress has come close to making the “Clarity” law a permanent legal framework for digital assets, but completing final procedures appears more difficult. This is despite it passing the House and getting approval from two committees in the Senate.
Reports say the U.S. Senate has postponed discussion of this “Clarity” bill this week, shifting its focus to other issues including Russian sanctions and federal nominations, according to what the CoinDesk website said on Monday. The timing of this postponement is worrying, as it comes just days before the August recess.
According to Polymarket, the odds that the bill would become law in 2026 fell to 28% from 40% on July 1 and 56% on June 1.
Chances of approving the CLARITY Act | Source: Polymarket
The passage of the CLARITY Act remains the most watched moment in the cryptocurrency sector. Its impact will go beyond digital assets and investor protection to also define the roles of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), as well as expand the scope of tokenizing real-world assets. The principle of non-retroactivity underpins the foundation for institutions seeking sustainability and regulatory clarity.
